With energy prices rising, switch to a cheaper plan
Compare Prices Now

Life Insurance Beneficiary Rules Australia

You can nominate anyone as your life insurance beneficiary — you’re also free to make changes further down the line.

We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!

What is a life insurance beneficiary?

A life insurance beneficiary is the person/persons you nominate to receive your life insurance payout when you pass away. People generally select a spouse or children as their life insurance beneficiary.

You choose your beneficiary when you take out a policy (though you can change it further down the line) and you're able to select how much you'd like each person to receive, if you have more than one person you'd like to nominate.

How to change life insurance beneficiary

Number 1

Contact your life insurer

Changing life insurance beneficiary or beneficiaries is fairly straightforward for policyholders. Contact your insurer and let them know you'd like to make changes to who receives the payout.

Number 2

Fill out the necessary documents

Most insurance providers will require you to fill out a change of beneficiary form. You can usually do this online; others will require you to print them out and mail them through to them.

Number 3

Send to the insurer

Send the updated beneficiary information to your insurer. They should confirm with you when they've received and updated your nominated life insurance beneficiaries.

How are life insurance benefits allocated?

Life insurance benefits can be allocated among your beneficiaries however you wish. Below is an example of how you might allocate your life insurance payout if you had four beneficiaires:

Nominated beneficiaryAllocation
Child 120%
Child 220%
Child 320%

How to find out if you are the beneficiary of a life insurance policy

If you think you may the beneficiary of an unclaimed life insurance policy, you can do the following:

  1. Do an unclaimed life insurance search via ASIC unclaimed money.
  2. Find and contact the life insurer (if your name appears in the search).
  3. Begin the claims process.

Who gets the life insurance payout if the beneficiary is dead?


Another beneficiary

If a beneficiary you have nominated dies, you should contact your insurer and nominate someone else. Remember, don't assume the benefit will be automatically reallocated if you have other nominated beneficiaries – it might not. You'll need to contact the insurer and do that yourself.

Private contract

The people in your Will

If you don't nominate another beneficiary, your life insurance payout will go to your estate and be distributed according to your Will, provided you have one in place. If you die without a Will, you leave what is called an "intestacy" which means your payout will be distributed by the state government based on a legal formula.

Is there a difference between life insurance and super beneficiaries?

Yes, if you take out life insurance through super, you need to be aware of the following:

  • The benefit goes to the trustee first. A superannuation life insurance benefit payment will be paid to the fund trustee, who will then distribute it to the beneficiaries as they see fit which can result in delays.
  • A binding death nomination. This means the super fund trustee must pay your life insurance benefit to the person or persons you nominate as your beneficiary. You need to make a binding death nomination with super or the trustee will distribute the benefit to your dependents as they see fit, which may not necessarily be as you'd like.
  • Tax may apply Benefit payments may be subject to tax depending on whether the beneficiaries are defined as financially tax dependent or not, whether it is paid as a lump sum or income stream and whether the super is tax-free or taxable, and whether the super fund has already paid tax on the taxable component.

How does policy ownership work?

When you take out a life insurance policy, you'll often have a few different ownership options. This determines who has total control over the policy. For example, the policy owner (or policyholder) can change the beneficiaries on the policy. They're also responsible for paying the premiums. The most common policy ownership options include:

Ownership typeOverview
Self ownershipThe life insured owns their policy.
Cross ownershipThird party ownership where someone else, often your spouse, owns the policy.
Joint ownershipYou still have some control over your policy, but you won't be able to make any decisions without your partner, who jointly owns the policy.
Super fund ownershipThe trustee of your super fund owns the policy. Any changes will need to be processed by the fund.
Tenants-in-common ownershipWhere benefits are received by the owner in proportion to their share in the policy. Not offered by many insurers these days.
Business entity ownershipWhere the policy is held for a revenue purpose. Here the business can claim a tax deduction for the premium and have the proceeds under its control.

Compare life insurance quotes from these direct brands

Name Product Maximum Cover Maximum Entry Age Terminal Illness Benefit Average Claims Acceptance Rate Average Claim Time Sum Insured
NobleOak Life Insurance
1.1 months
$20,230 million
Get 2 months free when you apply for one or more life insurance types with NobleOak's Premium Life Direct policy before 30 June 2022. T&Cs apply.
TAL Life Insurance
2.9 months
$36,630 million
Finder verifies that TAL has more Australian lives insured than any other provider - for 3 years in a row. Plus, get up to 15% off with TAL’s Health Sense program.
Real Family Life Cover
1.8 months
$53,462 million
Get a refund of 10% of the premiums you've paid (in the first 12 months) with The Real Reward™.
Medibank Life Insurance
3.8 months
$31,745 million
With Medibank Life Insurance, you’ll also get access to the 24/7 Medibank Nurse phone service. Medibank health members will save 10% on premiums every year. T&Cs apply.
Zurich Ezicover Life Insurance
Data not available
Data not available
$12,444 million
Get your first month free and a 10% discount by taking out a second life insurance policy (discount applies to the second policy). T&C’s apply.
ahm Life Insurance
3.8 months
$31,745 million
Get ahm life insurance by 30 June and keep your cover for 6 months to receive $100 cashback. T&Cs apply^.
RAC Life Insurance (Only available in Western Australia)
1.1 months
$20,230 million
When you purchase RAC Life Insurance, WA residents receive complimentary RAC membership which includes access to discounts on fuel, savings on shopping, entertainment and more. T&Cs at rac.com.au.

Compare up to 4 providers

Or if you prefer, speak to an insurance specialist to help you find personalised cover

Enter your details and one of our partner brokers will call you. They will discuss your quote, options and available products.

Do you smoke?

An adviser can help you find cover from trusted life insurance brands.

  • Get competitive quotes from multiple brands
  • Lower rate of declined claims (according to ASIC)
  • Save time and effort

Lender Logos

Life insurance beneficiary rules FAQs

More guides on Finder

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site